Carbon accounting must improve – report

British industry must find a consistent way of calculating and reporting carbon emissions, a lobby coalition of government, business and civil society representatives has said in a report.

To control Britain’s carbon footprint it must first be measured reliably, yet most FTSE 350 either make vague claims about their action on climate change with no figures to back them up or fail to report at all, said the report from the Aldersgate Group.

Only 27% of FTSE 350 companies reveal their carbon emissions, and only 10% provide standardised data that meet the most basic requirements of reporting under the Greenhouse Gas Protocol making it is “extremely difficult” for investors to make valid comparisons , according to the Aldersgate group, whose members include water giant United Utilities, environmental consultants Atkins, the Environment Agency and Friends of the Earth.

The EU ETS remains the main driver for companies to disclose their carbon emissions, alongside UK and international and UK company reporting standards, which are little more than recommendations, voluntary measures and investors’ pressure.

Investors are vulnerable to “green wash,” however, as companies that fail to tackle their emissions choose not to reveal the figures and instead issue vague qualitative statements about actions in the area of climate change.

“The current lack of rules on the disclosure of carbon dioxide is impeding progress. Without it, those who take action won’t reap the full rewards, and those who do nothing cannot be effectively challenged,” said Adrian Wilkes, chairman of the Aldersgate Group.

“Without it, Government cannot know whether its carbon targets and in particular its carbon budgets as proposed in the Climate Change Bill are being achieved in corporate Britain.”

A clearly defined standard with comparable data on carbon emissions for all large business operating in the UK would both drive and monitor progress, the report said.

Other recommendations of the Aldersgate Group report include:

  • Integrate a standard into corporate reporting guidance.

  • Advocate, adopt and promote the one standard, throughout all departments, presenting clear direction and expectations on business.

  • Lead by example by adopting a carbon accounting standard across the whole of Government.

    The report also calls for all businesses listed on UK Stock Markets to be required to disclose:

  • Absolute and relative total annual emissions (expressed as metric tonnes) of carbon dioxide and other carbon based greenhouse gases.

  • Year on year variance in carbon emissions, highlighting how and why a company’s emissions have changed over a set period of years and reporting against carbon reduction targets.

  • Amount of and financial value of their EU ETS CO2 emission allowances and value of credits for Joint Implementation and Clean Development Mechanism projects.

  • An assessment of climate change physical and regulatory risks in terms of the products and services in geographical as well as financial markets in which a company operates.

    The full report can be accessed here.

    Goska Romanowicz

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